Tax Tips For Selling Your Massachusetts or Connecticut House!

It’s almost that time of year… yes, tax season is almost upon us! If you are selling a house in our market, Massachusetts or Connecticut, or anywhere nationwide….you will love these tax tips for selling your home! This article is for informational purposes only!

For specific questions, contact a trusted tax professional, or the IRS!

Not All Profits Are Taxable

You will be able to exclude a high portion of your profits so long as certain conditions are met. Typically, you will be able to exclude $250,000 from your tax return, and up to $500,000 if filing a joint return. (However, if you sell house for a loss, you won’t be able to take a deduction for that amount.)

The deduction is only available when selling your primary residence, and can only be used once every two years. To qualify for the deduction, you must have lived in the residence for at least two of the past five years.

It is important that whenever you move, your address is updated with the IRS.

Other Exclusions

If you do not meet the requirements above, you might still be able to exclude a portion of your profits from your income tax. There are many special conditions you can meet in order to receive a prorated, tax-free gain. If you need to sell because of a change in your health, a job change or other unforeseen circumstances, you will be able to write-off a portion of the profit.

Reporting the Sale

You will need to report the sale if you receive a 1099-S form from the closing agent. This form provides the IRS with information regarding the proceeds from real estate transactions. To avoid reporting, make sure that you are able to exclude all profits. Let the agent know at the time of closing that the form will not need to be issued. Even if you are able to deduct all profits, if the form is issued, you will still need to file it with the IRS… even if no money is owed.

Capital Gains Taxes

If you are selling an investment property or house you have only owned briefly, you will likely be subject to the capital gains tax. Capital Gains taxes are dependent on how much you make. If you have a lower income, you will pay no capital gains taxes. People in higher tax brackets can pay upwards of 20%. Short-term assets are typically taxed the same as ordinary income.

First-Time Homebuyer Credit

Depending on the dates you bought and sold, you might have to pay back all or part of the credit you received. Typically if you move within 36 months of purchasing the home, the credit must be paid back upon the sale of the home. Special rules apply and can be found in Publication 523 from the IRS.

Deduct Selling Costs

When selling your feeding hills ma house, you will be able to deduct any reasonable cost when selling your home. This includes the closing costs, improvements made in order to sell the house, assessments, marketing costs, agent fees and so on. Keep track of every cent you spend in an effort to sell your home. Come tax time, this can amount to major deductions!

No matter what time of the year you sell, it is always important to seek the counsel of professionals. Consult your agent, accountant, and attorney to make sure you have set up the best terms for yourself.

Don’t stress too much about taxes when putting your house up for sale in Massachusetts or Connecticut. Odds are Uncle Sam won’t be getting his hands on your profits.

Do you want to sell your house in Massachusetts or Connecticut? We can help! Send us a message or give our office a call today! 413-455-0008

Testimonials

Mass Property Buyers

We were overwhelmed. “We needed to relocate my father to an assisted living facility. We were in the process of cleaning up the house and organizing when we realized it was just too much. We were overwhelmed. I didn’t want to list the house with a realtor in its current condition and with my dad still in the house we didn’t want a bunch of people walking through the house for showings. I reached out to many online companies. Most of them didn’t even respond. Finally we found Mass Property Buyers. They were able to look at our dad’s house later that day and had a cash offer to us the next day. The offer was fair and they were able to set the closing based on our timeline. They explained everything, the process from offer to closing was wonderful, we were able to close near my work so I didn’t have to miss work.”

Yvonne S - Jobs Hill Rd, Ellington CT

Mass Property Buyers

Helped Our Family. “The Mass Property Buyers team made the process of selling my mother’s house easy. My sister and I contacted them after our mother passed. The house needed repairs and was filled with years of junk. They gave us a reasonable price and took the house as is. We took whatever items we wanted and left the rest of the junk behind. They were fair and honest. I would recommend Mass Property Buyers to anyone who is looking to sell an unwanted house.

Julisa - Suffield CT

Mass Property Buyers

We sold our home fast. “Our experience with Mass Property Buyers was excellent, fast and professional. We had a time constraint in regards to closing since we were moving out of state, and we were able to close in 6 days, which we think is exceptional. We would definitely recommend them to anyone selling their home.”

Patrice P - Lakeshore Dr, Monson MA

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